Knight: We ‘Immunize’ Retail Investors

WASHINGTON, D.C. – Knight Capital “immunizes” retail orders from “some of the activities” that take place at marketplaces where professional trading firms try to outrace each other to get to an order, the market maker’s chief executive said Friday.

When a market maker takes in order flow from retail brokerages, the orders do not go directly to exchanges or market centers known as “co-locaton facilities,’’ where trading firms that rely on systems running at microsecond speeds to beat each other to the matching engines of exchanges, with servers placed as close as possible to those engines, under the same roof.

When “your retail order is routed to NYSE, we take it,’’ he said at the market structure conference of the Security Traders Association. “We internalize it. It doesn’t go to an exchange. It doesn’t go to some co-lo place. We internalize it immediately, it’s done.”

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